What to Do when the Investor Says No

What to Do when the Investor Says No

January 3, 2020 by investor

Changing the product, the price or the promotion? Today, we’ll talk about What to do when the investor says no.

In raising funding you’ll hear “no” quite often. There are many reasons why investors do not invest. Sometimes, they are busy with other deals. Other times, they are looking for a deal in another sector or stage.

If they are saying no because they are interested in investing and want to invest in your sector and stage, but not your deal, then what should you do?

There’s an old saying in sales, “No good salesperson takes no for an answer.” Naive salespeople take this the wrong way and basically put their foot in the door till the customer buys something. A better salesperson pursues the opportunity by changing the pitch, the product or the price.

If investors are saying no and it’s not for reasons of timing or a good fit, then you could change the price, which in this case is the terms of the deal. Offer a better valuation, additional warrants, or other incentives.

You can also change the product by improving the business with increased sales, a higher-level team, or a better product.

You could also change the promotion by repositioning the deal from one type of business to another. For example, you could reposition a deal from the EdTech sector to the impact sector.

In summary, don’t take no for an answer but don’t just put your foot in the door and harangue the investor. Give them a better deal to invest in.

Thank you for joining us for the Startup Espresso where we help startups and investors connect for funding.

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Copyright (c) 2021, Hall Martin and investorconnect.org. All rights reserved.

Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.